PSP Angels VIKTORIA SOLTESZ Founder of PSP Angels
Alternative Payment Methods: What are your Options? One of the most important decision for online businesses is how to collect payments from their clients. To understand the risks, costs and benefits, the companies first need to evaluate the available payment method options which they have. Its especially important when a company is a startup or when established businesses expand to new markets.
Emergence of APMs Over time, all the traditional payment methods have been deemed to be problematic in their own ways: traditional banking is time consuming and inefficient, especially in international transfers, cash is less favored by governments due to the risk of money laundering and tax avoidance. Fast forward to today, though traditional banking, card and cash are still utilized, we are also seeing the emergence of different payment methods with an aim to make the payment experience more seamless for both consumers and for merchants. This is when automatic payment processing, such as card schemes, comes into the picture. The use of card schemes, such as Visa and MasterCard, have rapidly grown and is one of the most popular payment methods out there. This is because card schemes facilitate transactions by acting as the middlemen between consumers and the banks. Not only do they help with payment processing, but since they play a big role in the payments sphere, they impose many rules and regulations to make sure all parties are in compliance with regulations and to ensure there are no fraudulent transactions. They also safeguard the transactions, to make sure that money is handled in the safest way. This resulted to the mass adoption of cards payments which are still one of the most popular payment methods. But card payments are very expensive and still not very popular in emerging markets such as LATAM, Asia and Africa.
GAME CHANGERS Issue #38
So we all know the traditional payment methods: cash, cards and bank wires. But what are the Alternative Payment Methods (APMs) and how one can choose the right ones.
